Burnett v. I-Flow Corporation
3:16-cv-00119
N.D.N.Y.May 12, 2016Background
- Plaintiff Heather Burnett alleges that a pain pump implanted during her June 19, 2003 shoulder surgery caused post-arthroscopic glenohumeral chondrolysis (PAGCL), a serious, often irreversible cartilage-destroying condition.
- Defendants are I-Flow (manufacturer), Kimberly-Clark (alleged purchaser of I-Flow in ~2009), and Halyard Health (alleged spin-off of Kimberly-Clark Health Care in 2014).
- Plaintiff filed a products-liability complaint in state court; defendants removed to federal court and moved to dismiss under Fed. R. Civ. P. 12(b)(6).
- Defendants seek dismissal both on successor-liability grounds (as to Kimberly-Clark and Halyard) and on the merits of various substantive claims (gross negligence, warranty, fraud-based claims, fraud-on-the-FDA, and punitive damages).
- The court construes the pro se complaint liberally, accepts well-pleaded factual allegations as true, and applies the Twombly/Iqbal plausibility standard while imposing Rule 9(b) particularity where appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Successor liability (Kimberly-Clark, Halyard) | Burnett alleges K-C bought I-Flow (~2009) and Halyard spun off in 2014, then manufactured/distributed the device; alleges successor status | Defendants say mere successor status is insufficient and point to documents (SEC filing) to show no successor liability | Dismissed as to successor liability with leave to replead; plaintiff must plead facts fitting New York exceptions to successor rule |
| Gross negligence | Allegations that defendants knew or should have known about risks and failed post-market surveillance/warnings | Defendants say allegations are conclusory and cite other courts/decisions (post-discovery) finding unknown risk as matter of law | Denied (claim survives); complaint plausibly alleges reckless indifference sufficient at pleading stage |
| Warranty (express & implied) | Burnett alleges device was represented safe; injury manifested later | Defendants: 4-year NY statute of limitations, surgery in 2003, suit in 2015 long after | Dismissed with prejudice — warranty claims time-barred (statute begins at sale/placement into stream of commerce) |
| Fraud / fraudulent concealment / negligent misrepresentation / fraud on the FDA | Alleged misrepresentations and omissions to medical community, public, healthcare providers, and FDA; reliance alleged | Defendants: claims lack Rule 9(b) particularity; fraud-on-FDA preempted by Buckman; requests dismissal | Fraud claims (except FDA-related) dismissed for failure to plead with particularity but with leave to replead; fraud-on-FDA dismissed with prejudice (preempted) |
| Punitive damages | Seeks punitive relief based on alleged knowing misconduct and concealment | Defendants seek to strike punitive damages as insufficiently pleaded | Denied — general allegations of knowing misconduct are sufficient at this stage to preserve punitive damages claim |
Key Cases Cited
- Holmes v. Grubman, 568 F.3d 329 (2d Cir.) (pleading: accept factual allegations and draw inferences for plaintiff)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: legal conclusions not entitled to assumption of truth)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
- Porat v. Lincoln Towers Cmty. Ass’n, 464 F.3d 274 (2d Cir.) (liberal opportunity to replead after Rule 12(b)(6) dismissal)
- Schumacher v. Richards Shear Co., 59 N.Y.2d 239 (NY) (exceptions to successor nonliability rule)
- State Farm Fire & Cas. Co. v. Main Bros. Oil Co., 101 A.D.3d 1575 (app. div.) (general rule that purchaser of assets not liable for predecessor torts)
- Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341 (fraud-on-the-FDA claims conflict with federal law and are impliedly preempted)
- Kramer v. Time Warner, Inc., 937 F.2d 767 (2d Cir.) (judicial notice of public filings permitted for existence of filings, not truth of their factual allegations)